Seoul falters in push to cut work hours

The supertall pair of towers in Yongsan International Business District in Seoul, South Korea --PHOTO: Adrian Smith and Gordon Gill Architecture

SEOUL - If Mr Lee Jong Chul, 43, has his way, he would not want to work fewer than the 70 or 80 hours a week that he often puts in at a car parts factory in Ulsan, south-east of Seoul.

'It's hard to turn away from extra money, because I know it will give my family a better life,' he told The Straits Times.

The extra pay is nothing to scoff at - the overtime that he works adds some 1.5 million to 2 million won (S$1,650 to S$2,200) to his monthly basic pay, which is about 1.6 million won.

'Besides, I don't have many years left to work like this, as people here retire in their early 50s. I need to earn more to save for the future,' said the father of a seven-year-old girl and a baby boy.

It is resistance from workers worried about the impact on their salaries and employers fearing higher labour costs that is threatening to derail a campaign in South Korea to shorten long working hours, despite recognition of the benefits of less, but more efficient, work.

Labour ministry officials who have led the drive said there was strong 'psychological resistance' to a mandatory measure to steer the nation away from the practice of long working hours.

'No one denies that it is the right direction for the economy,' Labour Minister Lee Chae Pil said. 'But in reality, there are many worries and fears on both sides, employers as well as employees.'

Since early this year, he has tried to plug a loophole in laws that effectively allows firms to have their employees work longer hours than the legal maximum.

South Korea mandates a 40- hour work week - with overtime capped at 12 hours a week - at workplaces hiring five or more people. But the rule does not apply to weekends or holidays, so it is not illegal for an employer to have his employees work 52 hours during the five working days and several more hours on weekends or official holidays.

The minister sought to change this and to submit a revision to the Labour Standard Act by the end of the month. But he has had to scrap the plan in the face of strong opposition.

Participants of an inter-ministerial meeting late last month 'concluded that the government should take more time to find a more realistic and workable solution', he said.

Firms feared that the planned measure would raise labour costs, which they say would chip away at their competitiveness in the world market, while workers worried about the impact on their pay cheques, he explained.

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Mr Moon Yong Mun, chief of a labour union at Hyundai Motor, the country's largest carmaker, said the plan missed a key point.

'Yes, we put in some of the longest hours (in the country). But any effort to cut our work will fail (because) it doesn't involve a reform of the wage structure.'

While base salaries are low, workers are paid as much as 350 per cent of their regular pay for work on weekends and holidays. Overall, allowances for extra work make up as much as 40 per cent of a regular blue-collar worker's monthly income, he explained.

Many other large manufacturers, such as steel giant Posco, use a similar tactic to meet surges in orders without adding new staff to production lines.

Employers, for their part, argued that the system was inevitable because of the rigidity of the labour market. To adjust production volumes to fluctuating demands, without extending working hours, they should be able to hire more workers in boom times and drop some in downturns. But the reality is that lay-offs are very difficult.

'The government should push for measures to turn the labour market flexible, rather than radical moves to cut (work) hours short,' said the Korea Federation of Employers in a statement.

Professor Park Tae Joo from the Employment and Labour Training Institute said overwork became the norm in Korean society through the consent of three parties - the government, management and labour unions - in the process of rapid industrialisation. 'It is more of a system that has taken deep roots in our society, with the government bent on achieving growth targets, management on reducing costs and unions on fattening pay cheques.'

The problem is that the culture of hard work no longer fits the economy, which must boost creativity and productivity to fire up its slowing growth engine, he said.

Korean workers have the longest working hours among countries in the Organisation for Economic Cooperation and Development (OECD). Their average was 2,111 hours a year in 2010, against the OECD's average of 1,692. South Korea ranked 23rd among the 31 OECD states in per capita labour productivity, at US$56,374 (S$72,100).

The government's commitment to the reform is diminishing, with President Lee Myung Bak fast entering a lame-duck period ahead of polls in December to pick his successor, observers say.

'Progress is unlikely in the remaining months of the current administration,' local media quoted an unidentified presidential aide as saying.

The President, a former company chief executive, is a strong advocate of shorter hours, preaching the need to work smart, not hard. 'Shortened hours will have many positive impacts on our society, such as improving lifestyles, creating new jobs and boosting private consumption,' he said in January.

Mr Lee Chae Pil is hoping the presidential candidates will pick up the issue, giving it much-needed momentum. 'Perhaps, there may be a political solution to this. We have a presidential election this year,' he said.